In my directorial debut, I’ve created a short film about three women with different roles in the microfinance community. All are part of the same system, and all are working toward their goals in their own way. Hope you enjoy.
[youtube=http://www.youtube.com/watch?v=mlJBK7FMcwg&hl=en_US&fs=1&]
The Ceres bus from Bacolod to Escalante
Today I woke up at 5:30 in order to make the 1.5-hour trip to Cadiz City before the first center meeting. The bus passes by 100 or so kilometers of sugar cane farms and fields. The loan officers arrive at the branch around 8 AM. There will be 14 center meetings led by 7 loan officers. Each loan officer is in charge of 1-3 meetings per day, depending on the proximity and size of the centers, which range from 6 to 85 members. This morning, all the loan officers are heads-down, calculating the day’s payments from the clients. It is important that this work is done ahead of time, as promptness and efficiency are a virtue when you are trying to meet with upwards of 100 clients per day.
This was written for the Kiva Fellows blog. Read the original here.
How do you define poverty? A basic needs index looks at whether (and to what extent) fundamental needs are fulfilled – food, water, shelter, clothing – and whether people have access to critical services – education, information (newspapers, etc.), sanitation facilities, healthcare, financial services. This is an absolute poverty calculation, which uses a standard threshold that can be compared across countries and continents. Another method is to use a national poverty line, usually a percentage of median income. For example, if the median income is $10,000 USD, and the poverty line is 60% of that, any family making below $6,000 is technically below the poverty line. This is a relative poverty calculation, because it is country-specific. Using this method, it doesn’t make sense to compare across countries, since the poverty line in wealthier countries with higher median incomes will allow for greater purchasing power than in much poorer countries. In microfinance (and development in general), you often hear about the percentage of the population that lives on less than $1/day – the definition of extreme poverty – or $2/day, or some other defining statistic of poverty.
Statistics are important for microfinance institutions (MFIs). When you know what you are dealing with, you can more effectively target the population with programs that are proven to work. It is important for an MFI to understand its clients and where they exist on the spectrum of poverty. This is actually more difficult to assess than you’d think. It is not feasible to ask clients how many dollars a day they spend, or even try to determine their income relative to the rest of the population. Instead, MFIs use social performance metrics – simple tools to help them to define exactly what they are as an organization and whom they are serving. They are basically proxies, which, when examined in aggregate, give the MFIs a profile of the poverty level of their clients.
“To be a mass tourist, for me, is to become a pure late-date American: alien, ignorant, greedy for something you cannot ever have, disappointed in a way you can never admit. It is to spoil, by way of sheer ontology, the very unspoiledness you are there to experience. It is to impose yourself on places that in all noneconomic ways would be better, realer, without you. It is, in lines and gridlock and transaction after transaction, to confront a dimension of yourself that is as inescapable as it is painful: As a tourist, you become economically significant but existentially loathsome, an insect on a dead thing.” – David Foster Wallace
Tourism in Cambodia has taken off over the last decade. From 1975 to 1979, the Khmer Rouge, a radical Maoist political party, controlled the country. During the four-year reign, Pol Pot and the Khmer Rouge attempted to turn Cambodia into an agrarian socialist state where everyone lived as peasants. Over two million people – a quarter of the population – were either murdered or died from disease or starvation before the Vietnamese invaded and took control of the country for the next decade. Only in 1998 with the death of Pol Pot did the civil war end, which is precisely when Cambodia became a hotspot for tourists. In 1998, the country had 217,000 visitors; in 2007, it had about 2.1 million. By 2010, the tourism minister expects about 3 million. It’s not surprising, given that the country is stunningly beautiful. The historical-minded traveler could spend days in Angkor. Over the last decade, Siem Reap, the provincial capital 10 miles away, has been turned into a traveler’s paradise, with high-end restaurants, massage parlors, and shops across the city. It is very popular among the French, Japanese, Koreans, and Chinese, all of whom have invested huge amounts of money in building up the infrastructure around Angkor Wat, including an international airport a few kilometers away that can handle wide-bodied jets.
In front of the Bayon, a temple at Angkor Thom.
Last week I spent three days visiting Angkor Wat and the nearby city of Siem Reap. I’d arrived two nights before and, in the span of 48 hours, had already become cynical and jaded about the entire experience. I’d spent the last three days getting ripped off by street vendors, restaurants, and taxi drivers, and was ready to snap. Feeling downtrodden by the constant scams and suffocating hordes of tour groups, I opted for a more natural, pure means of transportation the second day: a bicycle. For $1.50, I rented a fixed-gear Chinese bike for the day, threw on the muscle-tee I bought that morning, and started off for the Angkor temples north of Siem Reap.
The city of Angkor contains over 1,000 ancient stone temples, dating back over ten centuries. Built using stones dragged by elephants from mountains miles away, it is both the biggest pre-industrial city in history, spanning 1,000 km in its heyday, and home to the largest religious structure in the world – Angkor Wat, the famous temple depicted on the Cambodian flag. Once the capital of the great Khmer empire, Angkor was home to over a million people – an impressive feat in 1,200 AD. Despite it’s shortcomings (to which I am an active contributor), it’s an amazing sight to see.
In my previous life, I worked at a job that made growing a beard difficult. Every time I’d let it grow on vacation, I’d get close to an acceptable length, but still below the threshold of respectability. Naturally, when I learned I’d be working with Negros Women for Tomorrow and Kiva here in the Philippines, I looked at it as a great opportunity to reinvent myself as a man with a beard. On the street every day, people walk around with beards knowing that they are part of an exclusive fraternity, having chosen to distinguish themselves from the rest of the clean-shaven world. On this trip, I would not pass up the opportunity.
The process began on November 18th, two days before I left work. I had two weeks before work began in the Philippines, a narrow window for a full bloom. The above photo was taken on December 20th, showing a month of unchecked growth. In the first two weeks, I already had a nice base, extending from my sideburns, down my cheek, and underneath my chin. Halfway down my face, the pattern forms a right angle, before dropping precipitously past my mustache and down to the area below my chin. Continue reading
In August of this year, Negros Women For Tomorrow celebrated its 25th anniversary. The organization commemorated the occasion with an extravagant party titled “Handum” (Dream) with 6,000 attendees, including staff, borrowers, partners, and a pre-recorded message from the godfather of microfinance himself, Muhammad Yunus. Yunus catapulted microfinance into the mainstream in 2005 when he won the Nobel Peace Prize for his work with Grameen Bank in Bangladesh. Naturally, most people (including myself until a few months ago) think that it is a fresh, new approach to economic development and poverty alleviation. At 25 years old, however, NWTF is hardly fresh or new.
As a means of immortalizing the 25-year anniversary, the organization created a book of 25 of the most inspiring stories from its borrowers. In this blog, I’ve tried to lay out the history and mission of the organization to frame or provide context for other stories. The foreword to the book, written by the founder of the organization Dr. Cecilia del Castillo, offers a much clearer description of the organization. I quote it in its entirety here: Continue reading
The food in the Philippines garners mixed reviews from expats, but, as with most things, they might not be eating the right things. Beef is harder to come by here, and usually much more expensive. Fish, white meat (chicken), and the other white meat (pork) are the meats of choice in the country. And everything comes with rice. Rice and eggs for breakfast, chicken and rice for lunch, rice and anything else for dinner. When in doubt, I know I can’t go wrong with old faithful – grilled barbecued chicken on a stick.
I am heading to Vietnam until December 23rd, and Cambodia until January 4th. I am going to try to update the blog as much as I can during the break. See you in 2010.
The following is an article I wrote for The Inductive.
Within the international development community, a debate for the heart of the movement recently came to the fore with the IPO of Compartamos, the largest microfinance institution in Mexico. Divisive and controversial, Compartamos’ decision to sell shares and publicly list on an exchange is perhaps the clearest manifestation of where the two sides diverge. One side, led by Muhammad Yunus, founder of the Grameen Bank and winner of the Nobel Peace Prize in 2005, contends that, at its core, the sole fundamental mission of microfinance is poverty alleviation. The other side argues that the goal must be maximizing profit and, more specifically, ROE (return on equity) – extending services to a previously unbanked population and expanding via revenue growth. Just about everyone has an opinion on the decision and, at the very least, it allows for a great philosophical and economic debate about the most effective way to assist the billions of people who live below the poverty line.
It’s necessary to first give a little background on microfinance and its role in economic development. Without going into too many specifics, microfinance describes the provision of financial services to individuals below the poverty line with no material collateral. Microcredit, specifically, refers to the disbursal of small loans – generally between $50 and $1,000, depending on the sophistication of the institution and the industry in general (average loan with Compartamos is $623) – to individuals that cannot access credit via the traditional banking system. Given their small size, the cost of servicing these loans, as a percentage of the total, is high. Remember: it costs the same amount to service a $10,000 loan as it does a $100 loan (salaries, office materials, etc.), and these microfinance institutions often have to track down the borrowers on a weekly basis to collect the interest and principle. In other words, interest on microfinance loans are higher than one might think appropriate. In the United States, 50% for a loan may seem exorbitant. But, when you look at it relative to the alternatives (up to 800% from loan sharks) and the fact that these loans are expensive to service, high interest rates are a necessity. But at what level are interest rates exorbitant, even for an MFI? This is the question at the heart of the Compartamos debate.
